What does a nation ’s unemployment rate indicate?

1. Identify and describe the four basic inputs that make up factors of production. Give an example of each factor of production that an auto manufacturer might use.


2. What is a private enterprise system? What four rights are critical to the operation of capitalism? Why would capitalism function poorly in a society that does not ensure these rights for its citizens?

3. What does a nation ’s unemployment rate indicate? Describe what type of unemployment you think each of the following illustrates:

a. discharged armed forces veteran

b. bus driver who has been laid off due to cuts in his or her city ’s transit budget

c. worker who was injured on the job and must start a new career

d. lifeguard

e. dental hygienist who has quit one job and is looking for another

4. Explain the difference between monetary policy and fiscal policy. How does the government raise funds to cover the costs of its annual budget?


5. What is the difference between the budget deficit and the national debt? What are the benefits of paying down the national debt? What might be the negative effects?

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